15th Oct 2014 07:01
LONDON (Alliance News) - Orosur Mining Inc Wednesday said production in the first quarter was on target as it focuses on smaller, lower-grade production to bring down costs in the first half with plans to return to a larger, higher-grade production in the second half of the year.
In the first quarter ended August 31, the company produced 13,684 ounces of gold, in line with its target for the full year. It received an average gold price of USD1,302 per ounce during the quarter, compared to USD1,321 per ounce a year earlier.
Orosur reported an all-in-cost of USD1,182 per ounce and generated revenues of USD16.5 million in the first quarter compared to USD22.9 million a year earlier. It did generate a positive cash flow of USD3.5 million compared to producing a negative USD3.3 million cash flow in the comprable period a year earlier.
Orosur announced in its previous end-of-year results that it expected higher costs in the first half of the new fiscal year. During the first quarter it has focused on smaller, lower grade mining to reduce costs, but expects to return to mining at a larger scale of higher grade ore in the second half, it said in a statement.
"As in the past, variations in production and unit costs will occur quarter on quarter as the mine plan draws ore from several Arenal stopes with different grades, positions and sizes, changing the level of access required as well as the addition of ore from several open pits at varying grades and stages of stripping," said Orosur.
"Orosur is pleased to have once again delivered quarterly results in line with its guidance. The current gold price environment is not strong; however, the operational improvements implemented over the past 18 months have positioned the company to continue to generate positive cash flow whilst also advancing exploration and development efforts. After funding approximately USD3.6 million in capex and exploration during the quarter in and around San Gregorio, the company?s net cash position continues to grow," said Chief Executive Ignacio Salazar.
Orosur remains on target to achieve its full-year production of 50,000 to 55,000 ounces of gold after the first quarter, with production from its Arenal Deeps project in Uruguay to contribute between 70% and 75% of total gold production for the full year, it said.
Orosur has a debt balance of USD5.4 million at August 31, and expects to be "close to being debt free" by the end of the 2015 full year, it said. It had a cash balance of USD11.4 million at May 31.
During the first quarter, the company continued its exploration programs in the San Gregorio district of Uruguay, including 6,018 metres of exploration drilling and 539 metres of trenching, but did not conduct any work on its assets in Chile during the period.
By Joshua Warner; [email protected]; @JoshAlliance
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